WA aims to keep its petroleum regulation clout

Canberra’s push to create a national petroleum regulator by January has hit another hurdle, with the West Australian government demanding the state’s role in the new authority be enshrined in federal legislation.

Designed to cut red tape and strengthen regulatory powers after the 2009 Montara oil spill in the Timor Sea, the law was introduced in federal Parliament last month by Resources Minister
Martin Ferguson
.

While other states have agreed to hand over their powers, the law failed to specify a role for the WA government in the oversight of its local industry – Australia’s biggest.

In an attempt to overcome WA’s resistance to his plan, Mr Ferguson sent a memorandum of understanding to his state counterpart,
Norman Moore
, on Friday.

This included an expanded version of the existing National Offshore Petroleum Safety Authority – renamed the National Offshore Petroleum Safety and Environmental Management Authority – to be located in Perth under one roof.

But Mr Moore told The Australian Financial Review he wanted WA’s role in the local industry to be reflected in legislation so that future governments could not walk away from the non-binding memorandum.

“If the MOU meets the requirements of the state government, then I would be asking Martin to incorporate that into the legislation federally," he said. “If he won’t, then I will be asking the federal opposition to vote against it."

Because the opposition needs the support of independents to successfully vote down the law, it is unclear whether Mr Moore could stop its passage. But he has threatened to retain state-based powers of regulation, risking duplication for the industry if the issue is not resolved amicably.

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Mr Ferguson said he was confident the matter could be resolved and he continued to have “fruitful discussions" with the WA government.

Mr Moore said that, as structured now, the law repudiated a successful 40-year agreement between Canberra and the states over petroleum regulation and added that the body could not adequately consider state-specific issues such as fisheries and native title.

Under the federal proposal, approvals for offshore oil and gas projects would continue to be handled through the so-called joint authority process, allowing some state input on management of offshore resources.

But the designated authority – in WA’s case held by Mr Moore and allowing for a direct management role by the states – would be scrapped.

A new organisation, the National Offshore Petroleum Titles Administrator, would carry out the rest of the designated authority’s functions, while the state would continue to administer its titles onshore, on islands and in state waters.